Supreme Court New South Wales Medium Neutral Citation: Fresh Express Australia Pty Ltd v Gillebri Cotton Company Pty Ltd [2011] NSWSC 21 Hearing dates: 7 February 2011 Decision date: 07 February 2011 Jurisdiction: Equity Division - Corporations List Before: Barrett J Decision: Statutory demand set aside Catchwords: CORPORATIONS - winding up - statutory demand - application for order setting aside - whether genuine dispute as to existence of debt - no matter of principle - whether "some other reason" why demand should be set aside - accompanying affidavit sworn some four months before date of demand - replacement affidavit sworn two days after date of demand subsequently served Legislation Cited: Corporations Act 2001 (Cth), s 459E, s 459G, s 459H, s 459J Category: Principal judgment Parties: Fresh Express Australia Pty Limited - Plaintiff Gillebri Cotton Co Pty Limited - Defendant Representation: Mr F David David Legal File Number(s): 2010/417157 1This is an application under s 459G of the Corporations Act 2001 (Cth) for an order setting aside a statutory demand dated 22 November 2010 served on the plaintiff by the defendant. The demand relates to a debt said to be owing, due and payable by the plaintiff to the defendant for goods sold and delivered. 2The defendant has not entered an appearance and no one has attended court on its behalf today. The evidence establishes service of the originating process which the return date of 31 January 2011 was clearly shown. The defendant (which was represented by solicitors) was thus obviously on notice of the fact the matter would be before the court on that day. 3The plaintiff appeared before the Registrar on 31 January 2011. There was no attendance on behalf of the defendant. The registrar ordered that the matter stand over to today. I have evidence of the defendant's having been notified of the adjournment by letter sent by the plaintiff's solicitor to the defendant at the office of its solicitors. I am satisfied that the defendant was made aware of the time at which the matter would be before the court today. 4Despite this, there has been no appearance by the defendant and no explanation for the defendant's absence. I considered it appropriate to hear the plaintiff's application in the absence of the defendant. 5The plaintiff's claim is twofold. In the first place, it relies on the genuine dispute ground in s 459H(1)(a) of the Corporations Act . Correspondence included in the evidence that has been filed by the plaintiff shows a plausible contention that, if the debt claimed by the statutory demand is owing, due and payable at all, it is owing, due and payable not by the plaintiff but by a different company, Moonrocks Pty Ltd. The genuine dispute ground is therefore made out. 6The second basis of objection to the statutory demand is that there is, in terms of s 459J(1)(b), "some other reason why the demand should be set aside". 7The basis for relying on s 459J(1)(b) is that the statutory demand, although dated 22 November 2010, was, when served, accompanied by an affidavit sworn in July 2010, which affidavit was purportedly afterwards replaced by a new affidavit sworn on 24 November 2010. 8The requirement under s 459E(3) is that a statutory demand, when served, be accompanied by an affidavit that, among other things, "verifies that the debt . . . is due and payable by the company". 9Given the long interval - of the order of four months - between the swearing of the first affidavit (the July affidavit) and the creation of the statutory demand dated 22 November 2010, that affidavit cannot be regarded as one verifying the matters required by s 459E(3) to be verified. A deponent swearing or affirming in July 2010 simply could not say that a particular sum was due and payable in November 2010. The July affidavit was therefore not an affidavit of the kind contemplated by s 459E(3). 10The attempt to retrieve the position by the affidavit of 24 November 2010 miscarried. The requirement under s 459E(3) is that the statutory demand be "accompanied by" the verifying affidavit. An affidavit served two days or more after the service of the demand obviously does not accompany the demand. Also, an affidavit sworn or affirmed on 24 November and stating, as the section requires, that the debt specified in the demand "is" due and payable says nothing about the matter crucial to the efficacy of the demand, that is, that it relate to a debt which is, at the date of the demand (not some earlier or late date) due and payable. 11The defendant did not comply with s 459E(3) and, in that respect, denied the plaintiff one of the essential elements of the process leading to creation of a presumption of insolvency by reason of failure to comply with a statutory demand. 12On both bases put forward by the plaintiff, therefore, the plaintiff has established its case. 13I order that the statutory demand dated 22 November 2010 served on the plaintiff by the defendant be set aside. [The plaintiff's solicitor addressed on costs] 14I order that the defendant pay the plaintiff's costs of the proceedings. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 08 February 2011